Why it’s (almost) 2014 and you still need a set top box

I stumbled onto a discussion on Quora entitled “Why do we still have television set top boxes?” and as I often see, it’s full of conjecture and suspicion about the evil empire that is the pay TV industry. While I am not specifically trying to support or vilify anyone from that industry, I thought it worthy a response that has less conspiracy theory than others. So let’s start with some important facts:

1) Set Top Boxes (STB’s) take, on average, from day of deployment 30+ months to “break even” for a cable company2) Any tech support, home maintenance (“truck roll”), etc is costly to a cable company
3) Software updates, QA, etc are slow and costly to a cable company
4) Most north american pay TV providers now enable some form of “TV everywhere” service available by App or Browser
5) Many pay TV providers now offer same apps on Roku, Apple TV, and several smart TVs
6) Smart TV software platform updates happen 1+/year – which could easily result in incompatibility with pay TV services. Only very recently have any of the manufacturers begun to standardize their own platforms.
7) The technology in homes is moving at an *extreme* pace, so even if a pay TV operator is moving “fast” they will still appear, relatively speaking, to be moving slowly.
7a) thinking point – Until about 5 years ago, this just wasn’t the case at at all, the pay TV providers didn’t really even need to innovate whatsoever. So here we are 5 years later and they have APIs, multiple apps, etc – not too many industries one could point to and make a similar statement about incumbents…

I think if you add the above together, the answer should be something like this:

The pay TV industry would be happy to rid itself of STBs, but only *very recently* have viable alternatives hit the market. Pay TV companies are very rapidly adopting these platforms, but your definition of “rapid” is radically out of whack with how an established industry moves. Over the next few years you should expect most North American Pay TV providers to give you as a consumer multiple options for using their services in the platform of your choosing.

As a bonus:
8) CableCards *could have been* a good solution, but were way too soon to market to make the industry comfortable with them. Ask yourself this question: if you were the person in charge of P&L on the hardware deployment business, and you knew full well that consumers will call you with any problems whatsoever, would you support some “standard” by which *other company’s hardware* was causing YOU customer service issues? Me neither.

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About

Jeremy Toeman is VP Products for CNET. He has over 15 years experience in the convergence of digital media, mobile entertainment, social entertainment, smart TV and consumer technology. Prior ventures and projects include Viggle, Dijit Media, Sling Media, VUDU, Clicker, DivX, Rovi, Mediabolic, Boxee, and many other consumer technology companies. This blog represents nothing but his personal opinion and outlook on things.